From its outset, the conflict over Nagorny Karabakh served as a key impulse to the awakening of national sentiment in Azerbaijan, stimulating ethnic mobilisation and drawing wide sectors of the population into the movement for social and political reform. It spawned mass political opposition under the Soviet system, paving the way for the first democratic processes in Azerbaijani society. At the same time, the Armenian-Azeri conflict has been, and still is, used by political elites as a pretext to limit the rights and freedoms of citizens and delay much needed political and economic reform.

The Karabakh conflict initiated a crisis of power in Azerbaijan, beginning with cadre changes in the Communist leadership and later spilling over into a total transformation of the ruling elite and political system. Yet despite elite turnover and Azerbaijani Communist Party leader Ayaz Mutalibov’s introduction of the position of president (to which he promptly elected himself), without Moscow’s assistance the old Communist Party nomenklatura elite proved incapable of containing the conflict. Ensuing waves of protest served as a catalyst for the emergence of a new counter-elite composed of members of the nationalist intelligentsia. A third grouping was made up of former First Secretary Heydar Aliyev’s supporters. The ‘Karabakh factor’ was used actively both by these rival elites and by individual competing leaders within them to further their cause.

With the onset of full-scale armed hostilities, a pattern was established whereby governments in Baku rose or fell as a result of developments on the battlefield. In March 1992 the pro-Russian Mutalibov was forced to resign in the aftermath of the massacre of the population of the Azeri village of Khojaly by separatist Karabakh Armenian units and evidence of Soviet troops’ involvement in the killings. Following the subsequent fall of Shusha and Lachin, Mutalibov unsuccessfully tried to regain power; this attempt ended in the coming to power of the nationalist Azerbaijani Popular Front, led by Abulfaz Elchibey. The Popular Front administration initially enjoyed considerable legitimacy, securing the departure of Soviet military forces stationed in Azerbaijan and creating a national army. However, the new leadership’s inexperience, and its inability to either force a military victory in Nagorny Karabakh or have the courage and flexibility to seek a peaceful solution, resulted in widespread disappointment.

The Popular Front government fell following a coup organised from the city of Ganja; Elchibey fled the capital, appealing to Aliyev for help, and both the Popular Front and basic social order disintegrated. Azerbaijan descended into anarchy and lawlessness, in which armed groups and criminality burgeoned; exploiting this situation Armenian forces were able to occupy a further five districts around Nagorny Karabakh. In autumn 1993 Heydar Aliyev gained an overwhelming majority at the ensuing extraordinary elections, thus becoming Azerbaijan’s new president. Aliyev preserved the state of emergency instituted under Elchibey: mass demonstrations, marches and meetings were prohibited, and the media were subject to strict censorship. The Karabakh conflict was becoming an obstacle to stable development, democracy and freedom in Azerbaijan. Yet by early 1993 events on the battlefield were pointing to stalemate. Attempts to advance brought devastating losses to both sides amidst shortages of ammunition, crumbling military hardware and troops in dire need of regrouping. Unable to proceed with vitally necessary economic and political reform for as long as war continued, Armenia and Azerbaijan signed a ceasefire agreement in May 1994.

The ceasefire allowed Aliyev to tighten his control of the state administration. He dispensed with prime minister and Ganja coup leader Suret Huseynov. An uprising of the special police force (OPON), led by Karabakh veteran and Deputy Minister of the Interior Colonel Rovshan Javadov, was put down, and Aliyev ensured that opposition forces in the Ministry of the Interior, army, government and regional authorities were duly quelled.

The freezing of armed hostilities allowed Azerbaijan to return to a semblance of political normality. The state of emergency was abolished, political activity resumed and censorship stopped. Yet opinion over the cessation of hostilities was divided in Azerbaijan. The majority of opposition parties and organisations criticised the ceasefire agreement, summoning the people to fight for the full liberation of all Armenian-occupied territories, a view shared by many in the army and government. Indignation at the prospect of a peacekeeping force, perceived as a return of Russian troops to Azerbaijan, ran high. Swayed by public discontent and the views of Turkish and Western leaders, Aliyev refused to accept unilateral Russian mediation, turning instead to the organisation for Security and Cooperation in Europe (OSCE) Minsk Group.

Differences of opinion on how to deal with the Karabakh problem did not emerge as a salient government/opposition cleavage in the parliamentary elections of 1995 and presidential elections of 1998. Virtually all candidates spoke of the need to restore the territorial integrity of Azerbaijan. However, the opposition questioned the effectiveness of the hitherto fruitless negotiations facilitated by the Minsk Group, proposing to strengthen the army in order eventually to return the occupied territories by force. Typically, marginal candidates unburdened by responsibility for their statements proved the most jingoistic. The Karabakh issue was, however, exploited by the authorities to justify harsh measures repressing protest at the conduct of the elections. The regime consistently invoked the need for social stability, claiming that Azerbaijan’s defeat in the war had been due to domestic turmoil.

Following the failure of the various Minsk Group proposals of 1997-98 Aliyev made an unusual decision. Ignoring his obligation to keep the negotiations strictly confidential, the president publicised all of the proposals on the table and organised a parliamentary debate on the subject, to which members of the public and political parties were invited. The debate was not constructive. Most speakers expressed their total support for the official line, calling for national unity and swearing their readiness to give anything for the territorial integrity of Azerbaijan. A large number of parties in the nationalist/reformist camp, such as the Popular Front and Musavat, ignored the parliamentary debate, seeing it as only a political manoeuvre to offset public discontent with the lack of progress in the negotiations process. Opposition leaders publicly expressed their lack of confidence in Aliyev’s strategy of distributing oil contracts to great powers as a means of enlisting their support in lobbying Armenia. However, Aliyev achieved his goals at least in part. Society had been informed and it had been shown that the regime’s opponents had no constructive proposals for the resolution of the conflict. The negative reaction to the leaked proposals further legitimised the search for an alternative format for the negotiations.

What role does the Karabakh conflict play in the Azerbaijani political arena? Azerbaijan’s primitive political system is characterised by clan struggles and competition between regional elites. One of the consequences of the Karabakh conflict was the ascendance in government and business of Azeris displaced from Armenia (the so-called yerazi) and Azeris from the Autonomous Republic of Nakhichevan. These Azeris had had more contact – and direct experience of conflict – with Armenians. Although Azeris from Karabakh were and still are well-represented in business and government, the Armenian occupation of Karabakh and the surrounding regions has significantly reduced their economic and political potential. Other regional elites, such as the Baku-Shirvan, Ganja-Kazakh and Mugan-Lankaran groups, have been completely marginalised by the conflict.

Political parties and elites have sought to use the consistent preoccupation of public opinion with the Karabakh issue to their own advantage. Public consciousness of this ploy is reflected in opinion polls focusing on the factors behind continued Armenian-Azeri enmity, including polls conducted by the author. These have shown that the deployment of the Karabakh issue by internal political forces in their struggle for power, cited by 34.1 per cent of respondents, only marginally trails the interest which competing world and regional powers have in prolonging the conflict (35.4 per cent), a factor consistently emphasised in the media.

Whilst the disputes of clans and elites remain largely secret, political parties have to declare a public position on the Karabakh conflict. However, party positions vis-à-vis the Karabakh conflict are largely superficial and declarative, lacking specific suggestions regarding the format or content of the negotiations or the nature of possible compromises. Opposition parties such as Musavat, the Popular Front, the National Independence Party and the Democratic Party are less inclined to compromise than the ruling New Azerbaijan Party. Opposition leaders claim that it is only national patriotic forces that can mobilise the state’s resources to free the occupied territories and restore the territorial integrity of Azerbaijan. Superficial and facile, the opposition’s plan of action involves strengthening the economy by fighting corruption, improving the country’s defences and putting increased political and military pressure on Armenia. To a lesser extent, they criticise the ruling elite’s corruption and violations of human rights as factors damaging Azerbaijan’s reputation and lessening international support for the country. The highly numerous marginal parties and leaders are still more intractable, seeking to balance a grovelling attitude towards the authorities with a militant stance vis-à-vis Armenia.

In 2001, a group of competent and well-known politicians put forward the so-called ‘Karabakh Charter’ or ‘Charter of Four’. The group was made up of former foreign minister Tofik Zulfuqarov, former head of the Presidential Secretariat Eldar Namazov, former president of the state oil company Sabit Bagirov and economist Nazim Imanov. Realising that criticism of government policy and patriotic rhetoric were not enough to solve the Karabakh problem, the group felt the need for a consolidated standpoint enjoying widespread popular support and understanding. The Charter demanded that the Azerbaijani authorities cease to make unilateral concessions and adopt a phased approach to resolving the conflict, thereby ensuring the return of occupied Azerbaijani territories around Nagorny Karabakh. The Charter was much discussed and gained the support of over 20 political parties, as well as hundreds of public bodies and figures. The Charter established a sort of ‘maximum tolerance level’ of compromise for Azerbaijan, and fired a warning shot across the bows of the ruling elite that passing this level would elicit wide and consolidated social protest. Subsequent negotiations held at the highest level in Paris and in Key West came close to achieving agreement between the two leaders. Yet on returning to Baku President Aliyev was not able to secure the approval of even his own circle to a plan proposing the release of the occupied territories in return for the de facto ceding of Nagorny Karabakh to Armenia.

From the point of view of the opposition and civil society, current government policy on Karabakh is conservative, insufficiently flexible and, where the level of information is concerned, extremely primitive. The concentration of decision-making power exclusively in the head of state, a consequence of the consolidation of authoritarian rule in Azerbaijan, has a deleterious effect on the management of the peace talks. Dialogue between the government and the Armenian side is kept secret not only from the public at large, but also from important politicians, experts and even MPs. The regime reacts nervously to any popular or civic initiatives to advance the process of conflict transformation in Nagorny Karabakh.

Since the accession of President Ilham Aliyev there has been a certain hardening of the official position on the conflict. Bellicose statements about a readiness to resort to force to liberate the occupied territories have been accompanied by a substantial increase in military expenditure (from US $170 million in 2004 to US $300 million in 2005) and a rise in the number of ceasefire violations along the line of contact. Simultaneously there has been a marked increase in Azerbaijani diplomatic activity in international forums (the United Nations, the OSCE and the Parliamentary Assembly of the Council of Europe) aimed at securing a condemnation of the occupation and resettlement of Azerbaijani territory by Armenia. Ilham Aliyev’s lower levels of legitimacy compared to his father forces him to take a more hard-line position. On the other hand the growth of oil revenues frees Baku from foreign donors, a factor which strongly differentiates the situation from Armenia’s, where nearly one third of the state budget comes from external sources.

The behaviour of the ruling elite in Azerbaijan is, in sum, highly contradictory. The current leadership owes its rise to power to skilful manipulation of popular protest over the handling of the Karabakh issue, and to loud pledges to resolve the conflict quickly and without losses to the territorial integrity and sovereignty of Azerbaijan. A retreat from this position now would be dangerous and potentially threatening to government’s legitimacy. At the same time the need to consolidate its hold over key positions in the governing apparatus and the economy prompts the regime to try, through compromise and concessions, to move from the current unstable scenario of ‘no war, no peace’ to a more stable situation. Portraying itself to the international community as the ‘party of peace’ and the opposition as extremists advocating the return of Karabakh by force, the Azerbaijani government is seeking carte blanche to quash its political opponents. Yet for internal consumption, the ruling elite continues to churn out populist militant rhetoric. The difficult compromises vital for peace cannot be made until the regime abandons this duplicitous approach and engages in dialogue with authoritative opposition politicians and civil society representatives.

With a significant portion of Azerbaijani territory under Armenian occupation no political party or responsible leader would risk political suicide by suggesting acquiescence with Armenia’s territorial claims. Anyone doing so would quickly be branded a ‘traitor’ and ‘collaborationist’, with the result that any healthy ideas regarding democratisation and reform tied in with such a position would fall on deaf ears. As the party losing the military phase of the conflict, Azerbaijan faces the prospect of significant concessions in the course of the peace process. In these conditions the opposition, as the channel of protest and contrarian views, can only articulate more hard-line positions than the government, explaining the paucity of constructive ideas emanating from the opposition on the Karabakh issue.